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Utility

• The measure of the welfare or satisfaction of an investor or person.

 
 Embedded terms in definition
 Investor
 
 Referenced Terms
 Comps or comparables: Refer to pricing or evaluation benchmarking efforts. In real estate the term is used to determine comparable properties for evaluation or assessment purposes. In the securities markets, the term has similar implications for pricing bonds, stocks, and derivatives. For credit instruments, it refers to isolating the key pricing characteristics. Among these, are issuer, type of collateral or issue, maturity, maturity to first option date, average life, duration, option adjusted duration and so forth. In the case of a simple corporate bond, it would benchmark to a comparable life treasury and adjust for credit rating and other pertinent risk factors by a spread. This spread would be added to the prevailing treasury and indicate what a fair yield would before the corporate. For equity type securities, the process would involve finding similar companies in the same industry with similar economic profiles and outlooks. Among the considerations would be Utility stock or internet stock, growth prospects, cashflow, EPS, value per hit, and other determinative factors. Effectively, the process is pricing, marking-to-market, or evaluating by analogy.

 Dow jones averages: The most widely quoted and oldest measures of change in stock prices, tracking the prices of a group of stocks that represent Industrial, Transportation, and Utility companies.

 Indifference curve: The graphical expression of a Utility function, where the horizontal axis measures risk and the vertical axis measures expected return. The curve connects all portfolios with the same utilities according to γ and σ .

 Intramarket sector spread: The spread between two issues of the same maturity within a market sector. For instance, the difference in interest rates offered for five-year industrial corporate bonds and five-year Utility corporate bonds.

 Market sectors: The classifications of bonds by issuer characteristics, such as state government, corporate, or Utility.

 
 Related Terms
 Utility function
Utility value

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